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Following the Franco-Prussian War, Moltke the Elder and various Prussian generals convinced the Kaiser to permanently transfer Alsace-Lorraine to the German Empire. The general staff wanted AL for nationalistic (union of das Folk) and military purposes (for the fortification complex around Metz, access to iron and also to give the Prussians access to the entire border with France, as opposed to Baden and Bayern, whose loyalty to the new Germany wasn’t presumed in the 1870s). This was over Bismarck’s objections, who correctly predicted a permanent enemy in France that would be bent on recovering AL. Let’s look at the alternative: the Kaiser sides with Bismarck.

The German Empire is still created and Germany still occupies much of France to obtain reparations, upsetting the balance of power. But German relations with the rest of the world would be improved vs OTL. The French Empire falls, but the revanchism isn’t as strong. Generations of French children aren’t taught to “never forget” the lost provinces. It’s unlikely that France would enter into the 1894 alliance with Russia - the French press referred to it as “unnatural” right up to WWI, and the alliance was largely motivated by revanchism.

Maybe German colonialism would be stronger, while late 19th century French colonialism would be weaker – especially in Africa.

The Balkans would still be a powder keg, leading to constant friction between Russia and AH. I can’t imagine Russia always standing by and watching the Yugoslavs taken over by AH. But without a Franco-Russian alliance, maybe Russia backs down. I highly doubt Germany would restrain AH; they certainly didn’t in OTL. My feeling is that pan-Slavism gets the best of Russia/AH goes too far at some point, leading to war in the east. This time, the Central Alliance wins because France hasn't been itching for war. Germany occupies a dismembered Russian Empire, AH get the Balkans and the British and French sit the war out. AH and the Ottomans are still pretty much bankrupt and they’re running empires in an age of nationalism, but this war won’t cost as much, and maybe they can reform.

Maybe at this point France and Britain form an anti-German alliance, but their populations/press would never allow a first strike. Maybe some colonial conflict would lead to war, but that didn’t happen in OTL. As long as Germany doesn’t invade neutral Belgium or directly attack Britain, I don’t see Britain going to war.

In any event, Europe is going to be a very dangerous place for a long time after the Franco-Prussian War - you still have idiots in charge of every nation, militarism, a belief in the relationship between masculinity and war, etc. And I don't see anything saving eastern/SE Europe. No annexation of AL just might prevent a world war though.
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